The Supreme Court reinstates the Competition Appeal Tribunal’s decision on opt-out collective proceedings in Evans v Barclays Bank Plc
The Supreme Court’s judgment in Evans marks a significant development in the evolution of the UK’s collective actions regime1. As collective proceedings become an increasingly important tool for enforcing competition law and securing redress for large groups of claimants, the distinction between opt-in and opt-out proceedings has become paramount.
There is a delicate balance to strike between facilitating access to justice for large groups of claimants who, absent the regime, may be otherwise unable to seek redress, and protecting defendants from the risks of unmeritorious or burdensome litigation. The Supreme Court sought to address this challenge in Evans and provided authoritative guidance on the criteria for certifying claims as opt-in or opt-out. This article examines the history of the claim, the Supreme Court’s findings, and the broader implications for the UK collective actions landscape.
Background to the Case
The Evans case arose as a follow-on damages claim relating to the FOREX cartel, in which major banks were found by the European Commission (Commission) to have infringed Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 of the Agreement on the European Economic Area (EEA) by colluding to manipulate foreign exchange (FX) spot trading. The Commission issued two settlement decisions on 16 May 2019, with the first addressed to UBS, RBS, Barclays, Citigroup, and JPMorgan, and the second addressed to UBS, RBS, Barclays, and Bank of Tokyo Mitsubishi.2 These decisions found that traders at the relevant banks had exchanged commercially sensitive information in private chatrooms, with the aim of restricting competition. The Commission accordingly found infringements ‘by object’, meaning that the Commission was not required, for the purposes of finding an infringement and imposing penalties, to establish whether the conduct had anti-competitive effects. Fines ranged from nil (for UBS, which received immunity after being first to disclose the cartel) to €310.8 million.
Mr Evans issued collective proceedings in the Competition Appeal Tribunal (CAT), seeking the CAT’s authorisation to represent two distinct classes: (i) persons who entered into transactions with the proposed defendants in the EEA during their participation in the cartel; and (ii) persons who traded with other financial institutions or with the defendants outside their periods of cartel participation. The claim was brought as a follow-on action, in reliance on the Commission’s findings, and sought certification on an opt-out basis.
Whether Mr Evans’s claim warranted certification as an opt-out claim, as opposed to on an opt-in basis, was to be determined by the CAT in accordance with Rule 79(3) of the CAT Rules 2015. This rule permits the CAT to consider any factors it sees fit, including the strength of the claim and the practicability of opt-in proceedings. On 31 March 2022, in exercising its broad discretion under Rule 79(3), the CAT refused to certify Mr Evans’s proceedings on an opt-out basis. In doing so, the CAT cited both the weakness of the claim and the practicability of instead bringing the claim on an opt-in basis. In addition, the CAT believed that the significant number of large, well-resourced and sophisticated claimants within the proposed class made bringing the claim on an opt-in basis more suitable. This was despite evidence, which was accepted by the majority within the Tribunal, that the claim would not be brought on an opt-in basis. The CAT considered the claim weak as it had already been accepted that there were reasonable grounds to allege that the unlawful information exchanges enabled traders to make money on specific trades; however, Mr Evans’s claim was not limited to damages for losses on specific trades, but was predicated on a much broader theory of market-wide impact, which was not supported by the regulatory findings. It was therefore unclear how Mr Evans could prove a causal link between the cartel behaviour and the loss suffered by customers. Although the CAT considered the claim weak enough to warrant strike out, it ultimately chose not to exercise its power to do so under Rule 41(1)(b), to permit Mr Evans the opportunity to plead a plausible case on causation.
On 4 October 2022, the CAT granted Mr Evans permission to appeal its certification judgment. Importantly, this followed the publication of two further decisions by the Commission on 5 July 2022. The first was the so-called Sterling Lads Settlement Decision addressed to Barclays, RBS, UBS, and HSBC and the second was the Sterling Lads Ordinary Decision addressed to Credit Suisse.3 Both decisions found similar infringements to the 2019 decisions, with the relevant banks engaging in cartel behaviour in private chatrooms. The Sterling Lads Settlement Decision resulted in fines from nil (for UBS) to €174.3 million (for HSBC). Credit Suisse did not admit liability, but was found to have participated in the infringement and received a fine of €83.3 million in the Sterling Lads Ordinary Decision. After the Sterling Lads decisions were published, Mr Evans amended his claim form to add both HSBC and Credit Suisse as additional proposed defendants.
Relying on these two additional decisions, the Court of Appeal overturned the CAT’s decision at first instance, finding that it had erred in its approach to both the merits of the claim and the practicability of bringing it on an opt-in basis. The Court of Appeal held that the strength of a claim should be a “neutral factor” when determining whether proceedings should be opt-in or opt-out, and found that the number of claimants with relatively low-value claims, which it would not be proportionate for them to litigate other than on an opt-out basis, rendered opt-in proceedings impracticable.
On 17 April 2024, after the defendants were granted permission to appeal the Court of Appeal’s judgment, the Supreme Court was asked to resolve these issues. Ultimately, the Supreme Court reinstated the CAT’s refusal to certify the claim as opt-out, providing authoritative guidance on this aspect of the certification process. The Supreme Court considered four key issues: (1) the strength of a claim as a factor weighing against opt-out proceedings; (2) the practicability of opt-in proceedings; (3) the vindication of rights and deterrence as factors weighing in favour of opt-out proceedings; and (4) the admissibility of the Sterling Lads Ordinary Decision against Credit Suisse.
Key Legal Issues
1. The strength of a claim as a factor weighing against opt-out proceedings
Rule 79(3) makes clear that the CAT will consider all matters it considers necessary as part of its overall assessment of whether proceedings should be opt-in or opt-out, including considering the strength of the claim in conjunction with the practicability of opt-in proceedings. The weakness of the Evans claim influenced the CAT’s decision to refuse opt-out certification and even raised the possibility of striking out the claim. The CAT has jurisdiction to exercise this power of its own volition, although it ultimately decided not to, citing Hughes v Richards (t/a Colin Richards & Co), as Evans raised novel questions in an untested area.4
The Court of Appeal suggested that the CAT had erred in its approach, stating that the merits of a claim should be considered a “neutral factor” in the opt-in/opt-out analysis. The Supreme Court disagreed. The Supreme Court confirmed that the strength of the claim is in fact a powerful factor and, even if a claim survives strike out or summary judgment, the weakness of a claim should weigh heavily against opt-out certification. This approach recognises the “leveraging effect” of opt-out actions, which impose administrative burdens and can create settlement pressure on defendants even in unmeritorious cases. The judgment makes clear that the CAT is not required to conduct a full merits assessment at certification but should form a high-level view based on the pleadings and available evidence, which can weigh in on the opt-in/opt-out analysis.
2. The practicability of opt-in proceedings
Read in the context of the overriding objective, Rule 79(3)(b) implies that, if practicable, opt-in proceedings are preferred, as it would be disproportionate for defendants to face the additional settlement pressures associated with opt-out proceedings unnecessarily. However, the CAT must also consider whether refusing opt-out certification would be unjust to those affected by the alleged infringement, and overall balance the interests of justice in reaching its decision.
The Supreme Court endorsed the CAT’s evaluative assessment in determining practicability, confirming that the assessment should be objective rather than based on the subjective preferences or commercial interests of potential class members. The CAT was entitled to consider the composition of the class, distinguishing between large, sophisticated claimants, for whom opt-in was viable, and smaller claimants, for whom it was not. The Supreme Court rejected the notion that the mere unattractiveness of opt-in proceedings to funders or claimants is sufficient to render them impracticable. Instead, the Supreme Court must consider whether, in all the circumstances, opt-in proceedings are a reasonable and proportionate alternative.
In doing so, the Supreme Court cautioned against allowing the interests of a subset of claimants, whose losses constituted a comparatively small proportion of the aggregate total claimed, to dictate whether the proceedings should be brought on an opt-out basis. This was particularly the case for a class – such as the proposed class in Evans – that included “a group of financial institutions and fairly large commercial entities” with significant losses and “a very large number of individuals and smaller entities who have allegedly suffered loss but only in very small amounts”. As the larger commercial entities who had suffered material losses likely possessed the resources to pursue opt-in proceedings, the Supreme Court suggested that opt-out proceedings would not be justified to recover losses suffered by smaller entities with fewer resources, who would not have otherwise pursued litigation. In such circumstances, allowing Mr Evans’s claim to proceed on an opt-out basis “would be to allow the tail to wag the dog”.
3. The vindication of rights and deterrence as factors weighing in favour of opt-out proceedings
In the well-known decision of the Supreme Court in Merricks v Mastercard, it was acknowledged by Lord Briggs that ‘facilitating the vindication of rights’ and ‘deterring future wrongdoers’ from anti-competitive conduct are two important policy goals underpinning the collective actions regime. The Supreme Court again cited these goals in Evans, however it also suggested they do not “assist the Tribunal in making important decisions when operating the statutory scheme, such as a decision whether to certify collective proceedings as opt-in or opt-out”. This is due to the existence of other, competing policy aims underpinning the regime, that seek to protect businesses from the “the burden of defending unmeritorious or inflated claims”. As such, the Supreme Court was clear that these two policy goals do not create a presumption in favour of opt-out certification. It held that the CAT’s role is to strike a fair balance between enabling redress for claimants and protecting defendants from unjustified litigation burdens. The starting point is one of neutrality, with no predisposition towards either opt-in or opt-out – a position which, the Supreme Court suggested, the Court of Appeal had “lost sight of”. In this regard, the judgment re-iterated that opt-out certification is not a “last resort” entitlement simply because opt-in is unlikely to proceed.
4. The admissibility of the Sterling Lads Ordinary Decision against Credit Suisse
The Supreme Court provided guidance on the admissibility and relevance of regulatory findings, and unequivocally held that findings in the European Commission’s decisions addressed to third parties are neither admissible nor relevant in proceedings against other defendants who were not addressees of those decisions. The Court considered this in the context of the Sterling Lads Ordinary Decision as, despite being issued after the CAT’s judgment was handed down, the Court of Appeal determined that the Sterling Lads Ordinary Decision was admissible and had probative value in support of Mr Evans’s claim. The Supreme Court disagreed, describing the decision as “inadmissible and irrelevant to the [CAT’s] assessment of the merits of Mr Evans’ claim against the addressees of the Three-Way Banana Split and Essex Express decisions”.5
The Supreme Court was critical of the Court of Appeal’s suggestion that the Sterling Lads Ordinary Decision could be used to infer facts or strengthen the pleaded case in Evans. The Court noted that the Commission’s findings in the Sterling Lads Ordinary Decision did not address the specific conduct or causation issues central to the Evans claim as it did not consider the broader market-wide impact that Mr Evans alleged the cartel behaviour caused. The Supreme Court held that, even if the Sterling Lads decision had been available to the CAT at the time of its original decision, it would not have been admissible as evidence of the facts found, and therefore would not have altered the CAT’s assessment of the merits.
The Supreme Court’s findings on admissibility are grounded in the common law principle of fairness and the rule in Hollington v Hewthorn, which states that the findings of another decision-maker are inadmissible as evidence of the facts in another case.6 The Supreme Court rejected the Court of Appeal’s suggestion that the CAT is not bound by the rule in Hollington v Hewthorn, as Rule 55(1)(b) affords the CAT wide discretion on the admissibility of evidence. The Court of Appeal cited Qualcomm, in which the CAT decided that it is not bound by the rule in Hollington v Hewthorn, but should still adopt the same principle.7 However, the Supreme Court confirmed that, as explained in Rogers v Hoyle, the rule does apply to the CAT and stressed that it would be fundamentally unfair to submit a party to findings made by a regulator if they were not involved in the regulatory process and did not have the opportunity to contest the findings.8
The Supreme Court has therefore clarified that claimants cannot rely on regulatory findings against third parties to fill evidential gaps in their own case at trial. One caveat to this is that the Supreme Court expressly observed that it is permissible for a party to rely on findings of another decision maker for the purpose of identifying evidence which can reasonably be expected to be available at trial, for example, for the purpose of surmounting the certification threshold, and the findings of that other decision maker are admissible for that purpose. Regulatory findings therefore may be persuasive in some contexts, but they do not substitute for the CAT’s independent assessment of the merits in collective proceedings.
Implications for the UK Collective Proceedings Regime
The Supreme Court’s judgment clarifies the criteria for certifying collective proceedings as opt-in or opt-out under the UK collective proceedings regime. The judgment reaffirms the CAT’s broad discretion in managing collective proceedings, and reiterates the high bar for opt-out certification where claims are weak or where opt-in proceedings are objectively practicable for significant portions of the class.
It remains to be seen whether the Supreme Court’s determination that the strength of a claim is indeed a relevant factor in evaluating whether the proceedings may be brought on an opt-out basis will lead to more rigorous scrutiny of the merits of claims at the certification stage. For claims brought on an opt-out basis on behalf of a merchant class, the Supreme Court’s judgment is expected to lead to increased focus at the certification stage on the composition of the proposed class, and an evaluation of whether the bulk of the aggregate damages claimed sits with large, well-resourced commercial entities, capable of seeking individual redress, or smaller entities with comparatively fewer resources, for whom litigation outside the opt-out framework would be disproportionate.
The judgment also provides clear guidance on the limited use of regulatory findings against third parties, reinforcing the need for claimants to establish their case on the merits, using documents disclosed in the litigation, rather than placing reliance on extraneous regulatory decisions or interventions. Although the pathway for collective redress remains open, the gateway is now more clearly defined and guarded.
1 Evans v Barclays Bank Plc and others [2025] UKSC 48.
2 Case AT.40135-FOREX (Three Way Banana Split) C(2019) 3631 final; Case AT.40135-FOREX (Essex Express) C(2019) 3621 final.
3 Case AT.40135-FOREX (Sterling Lads) C(2021) 8613 final; Case AT.40135-FOREX (Sterling Lads) C(2021) 8612 final.
4 Hughes v Richards (t/a Colin Richards & Co) [2004] PNLR 35.
5 Evans v Barclays Bank Plc and others [2025] UKSC 48, §167.
6 Hollington v F Hewthorn & Co Ltd [1943] KB 587.
7 Consumers’ Association v Qualcomm Inc [2023] CAT 9.
8 Rogers v Hoyle [2014] EWCA Civ 257; [2015] QB 265.
